Friday, November 30, 2007

ULCRA repealed, finally

The Maharashtra Government finally repealed the Urban Land Ceiling Regulations Act (ULCRA) yesterday. Some of my quick thoughts on the impact of this move.

- Boost for transparency in a sector which badly requires it
- A probable end to land grabs by politicians and bureaucrats
- Easier access to Central Government's funds for Mumbai's infrastructure projects
- Longer-term real-estate supply now available, should aid stability for prices
- Red tape cut and therefore quicker clearances for real-estate projects

- Potential for land-hoarding by owners, unless the Government gets serious about the proposed tax on vacant land on that part of land not being used for development by the owners
- No immediate impact on property prices, given that the land freed from ULCRA will take at least a couple of years to develop
- Not a definitive answer to the housing problem for Mumbai; although the Government has said that acquired land will be given to MHADA and MMRDA for low-cost housing, chances are owners will go to court on this. Besides Government sponsored housing schemes are prone to misuse as well as lack of transparency.

Update: Various newspapers are giving different numbers for the exact quantum of land released with the ULCRA repeal. Today's DNA, seems to make sense, so here's a summary.

Total Land declared surplus by the Govt since 1976=17,000 acres
Of which, land declared exempt=12,000 acres
Approx. balance surplus land to be used for low-cost housing=5,945 acres
Of which, land declared exempt (again)=1,827 acres
Which leaves a balance of=4,118 acres
Of which, Govt. orders acquisition of=3,500 acres
But acquires only=2,282 acres (challenged by owners and stayed by courts)
Actual land to be made available now=1,218 acres